The Wall Street Journal
Trucker Land Air Express of New England Seeks Emergency FinancingCarrier resumes operations but shuts two terminals, lays off workers as shippers switch to competitors following regulatory action
By
BRIAN BASKIN
Jan. 11, 2016 1:10 p.m. ET
1 COMMENTS
Trucking company Land Air Express of New England has scaled back operations and is seeking emergency financing in its first days back in business after federal regulators shut the firm down over safety violations.
Land Air was ordered off the road in late December by the Federal Motor Carrier Safety Administration for failing to properly test its drivers for drug and alcohol use, among other violations. At the time, the Williston, Vt.-based company operated about 330 trucks across the Northeast, making it one of the largest trucking companies ever shut down by the agency.
The FMCSA said Thursday that Land Air could resume operations on a “conditional” basis. However, many customers switched their business over to rivals in recent weeks, and the company needs financing after operating for two weeks with no revenue, said Bill Spencer, Land Air’s president. The company’s trucks returned to service on Monday, he said.
‘I’m out there beating for private equity, trying to save my employees’ jobs and my job.’
—Land Air Express of New England President Bill Spencer
Land Air specializes in less-than-truckload service, in which trucks carry goods for multiple customers on routes. SJ Consulting Group, a transportation research firm, estimates the privately-held company was the 44th largest carrier in the U.S. and Canada in 2014, with $83 million in revenue in LTL operations.
Land Air has shut two of its 14 terminals, in Burlington, N.J. and Carlstadt, N.J., and laid off some employees. Several employees told The Wall Street Journal last week that although they hoped to still have jobs with the company, they hadn’t been paid since before Christmas and they were told to apply for unemployment benefits.
“We will be starting much smaller,” Mr. Spencer said. He said closing the terminals was “a necessary move for us to get back into a position of strength.”
He said Land Air would “find out today” how many shippers were willing to work with them.
The company faces big hurdles in regaining the confidence of both customers and employees, said Satish Jindel, president of SJ Consulting.
Land Air faces tough competition from regional competitors even under the best circumstances, and those rivals probably have sought to poach customers since the trucking regulatory arm of the U.S. Department of Transportation shut down the company, Mr. Jindel said. Winning back shippers will be a long and costly process, and initially will likely require heavy discounts on moving freight, he said.
“That is just not sustainable financially, Mr. Jindel said.
Mr. Spencer said he is meeting with private-equity firms to line up financing to see the company through. He said he would be open to selling the company, though he added that he isn’t actively looking for a buyer.
“I’m out there beating for private equity, trying to save my employees’ jobs and my job,” Mr. Spencer said.
The FMCSA shut down Land Air on Dec. 29 after the company failed to address issues raised in a late-October inspection. In addition to the drug and alcohol testing, Land Air was cited for allowing an employee to drive a truck without the proper licensing, and for employing a driver who had tested positive for a controlled substance, and other violations.
Land Air now faces a “heightened, stricter, specified set of safety requirements” and close monitoring, the agency said.
:: and anyone with any kind of self respect wouldn't be working for free. If they had their ducks in a row, they wouldn't have been shut down to begin with.
